Inside Wall Street

A Makeover at NeoStem

June 18, 2009

Big plans by tiny NeoStem ( (NBS)), which collects and stores adult stem cells for future medical use, have helped catapult its stock to 2.27 a share from 50 cents on Mar. 9. NeoStem applied for patent protection in May for a technology that allows use of an adult's stem cells in cosmetic surgery. And it took a 51% stake in a profitable Chinese drug company with $60 million in sales to distribute stem cell therapies in China. In April it raised $11 million in China to improve its balance sheet. It also signed a 10-year pact on June 15 with China's Enhanced Biomed Holdings to build stem cell treatment clinics in China. Rachel Kirsch of Pro-Active Research Group (it did business with NeoStem) rates the stock a speculative buy, seeing it at 5 in a year. Gary Goldstein, president of Mithra Research, says China operations should yield revenues of $50 million a year. His 12-month target: 7.
Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.